On January 1, 2024, Displays Incorporated had the following account balances: Account Title Debit Credit Cash $ 27,000 Accounts receivable 24,000 Supplies 30, 000 Inventory 62, 000 Land 232, 000 Accounts payable $ 28,000 Notes payable (5%, due next year) 25,000 Common stock 191, 000 Retained earnings 131, 000 Totals $ 375, 000 $ 375, 000 From January 1 to December 31, the following summary transactions occurred: a. Purchased inventory on account for $335,000. b. Sold inventory on account for $595,000. The cost of the inventory sold was $315,000. c. Received $560,000 from customers on accounts receivable. d. Paid freight on inventory received, $29,000. e. Paid $325,000 to inventory suppliers on accounts payable of $334,000. The difference reflects purchase discounts of $9,000. f. Paid rent for the current year, $47,000. The payment was recorded to Rent Expense. g. Paid salaries for the current year, $155,000. The payment was recorded to Salaries Expense. Year-end adjusting entries: a. Supplies on hand at the end of the year are $5,000. b. Accrued interest expense on notes payable for the year. c. Accrued income taxes at the end of December are $23,000.Adjusted Displays Incorporated Income Statement For the year ended December 31, 2024 Gross profit $ 0 Total operating expenses 0 Operating income 0 0 $ 0Adjusted Displays Incorporated Balance Sheet December 31, 2024 Assets Liabilities Current Assets: Current Liabilities: Total Current Assets 0 Total Liabilities 0 Noncurrent Assets: Stockholders' Equity Total Stockholders' Equity C Total Assets 0 Total Liabilities & Stockholders' Equity $ 0Analyze the following for Displays Incorporated: (a) Suppose Displays Incorporated decided to maintain its internal records using FIFO but to use LIFO for external reporting. Assuming the ending balance of inventory under LIFO would have been $84,000, calculate the LIFO reserve. LIFO reserve is: (b) Assume the $62,000 beginning balance of inventory comes from the base year with a cost index of 1.00. The cost index at the end of 2024 of 1.20. Calculate the amount the company would report for inventory using dollar-value LIFO. Ending inventory using dollar-value LIFO: (c) Indicate whether each of the amounts below would be higher or lower when reporting inventory using LIFO (or dollar-value LIFO) instead of FIFO in periods of rising inventory costs and stable inventory quantities. 1. Inventory turnover ratio Higher under LIFO 2. Average days in inventory Lower under LIFO 3. Gross profit ratio Lower under LIFO